On Tuesday, September 29, Manhattan District Attorney Cyrus R. Vance, Jr., announced the sentencing of personal injury attorney Stephen R. Krawitz, 63, to 4-to-12 years in state prison for stealing more than $1.9 million from settlements obtained for the benefit of at least 57 of his firm’s clients. On July 29, 2015, Krawitz pleaded guilty in New York State Supreme Court to Grand Larceny in the Second Degree and Scheme to Defraud in the First Degree.
“The tragedy in this case is that many of Stephen Krawitz’s personal injury clients were unnecessarily forced to suffer further as a result of their own attorney stealing from them,” said District Attorney Vance. “Since the defendant was indicted in December, the investigation by my Office’s Financial Frauds Bureau uncovered nearly 40 other clients who have been victimized by this attorney. Taking advantage of their vulnerability, he pocketed nearly $2 million in misbegotten funds, including from one client who died of cancer without ever receiving the settlement money rightfully owed to him.”
“The theft of law client money is not only a crime but a violation of the trust placed in lawyers. On behalf of the 297,000 members of New York’s legal profession, the Lawyers’ Fund strives to restore that trust by reimbursing the financial harm caused by this one former member of our profession,” said Timothy O’Sullivan, Executive Director & Counsel for the New York State Lawyers’ Fund for Client Protection. “The Fund’s Trustees wish to express their gratitude to District Attorney Vance and to Assistant District Attorney Jaime Hickey-Mendoza for the successful prosecution of Mr. Krawitz and for the extraordinary support to the Lawyers’ Fund which has enabled our Fund to provide prompt reimbursement to Mr. Krawitz’s victims.”
According to his guilty plea and documents filed in court, KRAWITZ owned Stephen R. Krawitz, LLC, a personal-injury law practice at 271 Madison Avenue in Manhattan. KRAWITZ handled many personal injury and medical malpractice cases, which often resulted in a settlement owed to his client. Between November 2008 and March 2014, KRAWITZ stole approximately $1,913,155 from more than 50 clients by depositing their settlement checks into his Interest on Lawyer Accounts (“IOLA”) and using the money for his own personal benefit. During the course of the fraud, the defendant withheld all settlement money from a majority of the more than 50 clients, and others received far less than what they were owed. When questioned by his clients, KRAWITZ lied about the receipt of the settlement funds, and also underreported the size of the settlement agreements. Additionally, KRAWITZ settled multiple cases in Florida, New Jersey, and Connecticut without a license to practice in those states.